How much is the average workers’ comp settlement in Michigan?
Many of the disabled employees who contact our office want to know the average workers’ comp settlement in Michigan. Our job as workers’ comp attorneys is to explain legal rights and make recommendations. This allows them to make an informed decision about settlement and what is in their best interests.
Statistics published by the Workers’ Disability Compensation Agency show the average settlement amount in 2019 for Michigan was just $58,641.58. Most people are shocked to learn this because it does not seem like much money. This is especially true for a disabled employee who will need lifetime work restrictions.
Michigan workers’ compensation is not a fair system and a workers’ comp settlement is usually the best option. This allows a disabled employee to get cash and move on to a new job. Here are some issues to think about before deciding to settle a workers’ comp case.
A Michigan workers’ comp settlement allows a disabled employee to give up their benefits in exchange for a lump sum cash payment. This money can be used for education, vocational retraining, transitioning to a new job, starting a business, or retirement. There is no money included for pain and suffering under Michigan law. Settlements are income tax free.
Settlement is an attractive option for anyone who wants to do medical treatment on their own terms. Disabled employees do not have to beg the insurance company for needed medical care or wait months for it to get approved. Many of our clients are happy to pay out-of-pocket and negotiate a better price with their doctors.
What is the average workers’ comp settlement in Michigan based on?
It is based upon how much the insurance company believes it must pay in future workers’ comp benefits. This includes wage loss, medical treatment, and vocational rehabilitation. Pain and suffering are not factors!
A good starting point for settlement is multiplying the weekly comp rate by 52. This shows how much the insurance company might have to pay in annual wage loss benefits. Insurance companies will typically pay a settlement based upon multiples of this amount. Watch out for insurance companies who insist on using post-injury wage earning capacity (PIWEC) to reduce the weekly comp rate. This usually occurs when someone is considered only “partially disabled.” Our experience shows that insurance companies abuse this part of the law and unfairly reduce settlement amounts.
We also recommend speaking with a doctor about future medical needs. This can be used to estimate medical costs for negotiation purposes. It is also important to evaluate these medical costs when establishing a Medicare Set-Aside (MSA). Do not attempt settlement without understanding how it can impact other potential benefits.
Hiring a Michigan workers’ comp attorney usually results in a larger settlement amount. Understanding legal issues and medical needs is the key to a successful negotiation. Attorney fees are capped at 10% of the total settlement and increase by only $1,250.00 if the claim has been disputed.
Watch out for insurance companies who make low-ball settlement offers and want to take advantage of financial distress. Do not listen to friends or relatives who are ignorant about the law. Please call us for a free telephone consultation and let us help.
Michigan Workers Comp Lawyers never charges a fee to evaluate a potential case. Our law firm has represented injured and disabled workers exclusively for more than 35 years. Call (844) 316-8033 for a free consultation today.